Over the past two decades CGI has become increasingly prominent in films and television, and along the way animatronic special effects have gradually been consigned to the history books. When the BBC aired Walking With Dinosaurs in 1999, the bar for CGI in television programmes was well and truly raised.

However, in 2007 the prehistoric cast of Walking With Dinosaurs swapped TV for live theatre, this time using state-of-the-art animatronics technology to bring the dinosaurs to life. Walking With Dinosaurs: The Arena Spectacular has been touring the globe ever since, and from July this year the production has been travelling around the UK, before it finishes its run this month. Essentially, it is an adaptation of the TV show: a 90-minute live-action documentary from the ages when dinosaurs ruled the world.In total, 20 dinosaurs make up the show's cast, ranging from the towering brachiosaurus to the tiny utahraptors. The smallest five dinosaurs are basically men in suits, albeit highly elaborate ones. Predators or xenomorphs, these are not. But the technology that leaves most jaws gaping at the arena shows is in the large dinosaurs – which took four years of research and development.

"They follow anatomical and biology parallels" of the dinosaurs' structures, says Sonny Tilders – whose official title is creature designer. "The bones are generally made of steel. Then they have these 'muscle bags': stretchable netting filled with styrene beads. They make the shape of a bicep or whatever, and stretch between the two parts of the moving limbs. As the dinosaurs move, and as a limb moves, it's actually changing shape. It does what a real limb does."

A lot of hot air

In addition to the muscle sacks and metal frames, the three largest dinosaurs – the tyrannosaurus rex and two brachiosaurs – are also made from fan-forced inflatable sacks, similar to car airbags. These sacks account for such a large volume of the biggest dinosaurs, they are actually 90% inflatable, greatly lowering their weight and also meaning they can be deflated for transport and storage.Two principal technological advances make the show's dinosaurs so much better than previous animatronics creations. First: the hydraulics. The designers pondered what mechanisms could move something so big, yet make it look natural. "Hydraulics came up as the thing that was most appropriate," says Tilders. "But the problem was they are designed to deal with large forces at high precision, and we didn't need the rigidity that makes hydraulics look so robotic."

Although pessimistic hydraulics manufacturers told Tilders his ambitions were impossible, they continued researching regardless. "Somehow we managed to do it. We managed to develop a hydraulics system akin to the way muscles work. That fluid, organic movement – I don't think that's really been done before."

The second, and biggest, hurdle was the dinosaurs' skin. It needed to look convincing, endure show after show and be very lightweight. "The skin is a big surface area," says Tilders. "For our first build of all the dinosaurs we used almost 3km of Lycra to construct the skins. That's a huge weight deficit. It's one of our biggest components. You'd think it's the steel and all the other things – in fact, it's the skin."

But is it purely Lycra? Surely anyone could have figured that one out? Tilders is keen to keep his tricks up his sleeve: "The skin is just Lycra but we do something special to it, which I can't tell you about."

Three operators are required to control a large dinosaur. In between the legs of each one is a chassis where a driver sits; they are responsible for driving their dinosaur around the arena and making sure it is functioning properly. Tilders says they're like "onboard engineers".

The dinosaurs' most complex movements fall to external puppeteers situated off-stage. These are known in the industry as "voodoo operators" – because whatever move they make, the dinosaur will too. They control the robots via radio controllers. Each has a "Waldo rig" – another industry phrase for the system used to transmit motion to the remote puppet. In this case, the rig is a lever and handle which translates the operator's arm movements into dinosaur actions.

"We have a lead voodoo operator who operates the head, neck, tail, – basically all the gross body movements," says the show's head of creatures, Michael Hamilton. "Then you have the auxiliary operator who operates things to do with the eyes, the blinking, the mouth, all of the sound effects."

"It actually looks like something out of Robocop," he says. "The voodoo operators have a cradle that they rest their right arm on, which operates the body. Then you've got what looks like a spine coming off the top of that cradle, which operates anything to do with the neck and head... It's interesting watching the guys up in the rig. They kind of do a dance in the voodoo lounge: moving and jigging around."

Each group of three forms part of a much bigger team of puppeteers, along with the actors in suits who run among the towering animatronic dinosaurs. The nightly shows are highly complex routines that rely on precise synchronisation among the actors, not just technological brilliance conjured up behind the scenes.

Back from the dead

All this technology would mean little if the subject were not compelling to watch. But, put simply, dinosaurs are cool. It's the reason primary school children are taught about them rather than the origins of penicillin, the reason tourists flock to the Natural History Museum, and it's the reason the Arena Spectacular is so successful – the US show has made $110m (£66m) since July 2007. "I think dinosaurs are a bit of a no-brainer," says Tilders. "They are instantly appealing to a certain generation. The dinosaurs are the key to it all."

And this success looks set to continue for Tilders, Hamilton and their team. An animatronics production of King Kong is in the pipeline and they're also working with Dreamworks Animations to adapt a live show of the studio's upcoming movie How to Train Your Dragon.

"I've often thought animatronics died an earlier death than it had to," says Tilders. But the Arena Spectacular has "opened up a new genre: this combination of high-tech puppetry and live entertainment". The future of animatronics looks brighter than it has been for a long while. The special effects that were once on the brink of extinction have found a new lease of life.